Incidence of speculations in equity return: evidence from Indian share market
by Jimnee Deka; Meghna Sharma; Kamesh Tiwari
International Journal of Intellectual Property Management (IJIPM), Vol. 14, No. 5, 2024

Abstract: The capital asset pricing model (CAPM) and the efficient market hypothesis (EHM), two essential aspects of theorising traditional financial theories, assume rationality in investors and the overall market. These challenge the assumptions of investors being rational and making informed decisions. Human sentiments, behaviour, and emotions have started conquering the study of financial markets. Several studies are already dedicated to learning the risk-return component of the financial market. But there has been less devotion towards understanding what makes equities investments to be considered inherently riskier than debts. The analysis here attempts to separate fundamental and speculative factors from the performance of the Indian market indices. The fundamental element mimics the pattern in the firms' profits and how that affects investment returns. The impact of a change in the valuation of earnings on investment returns, or in other words, a movement in the P/E values, is shown in the speculative component. The optimism and pessimism level of investors is the cause of this. Statistical analysis of the market's overall returns demonstrates a considerable prevalence of speculative elements.

Online publication date: Mon, 23-Sep-2024

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Intellectual Property Management (IJIPM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com